Understanding Energy Provision and Conflict

As we are forced to change the way we think about energy, the energy consumer is caught between need and the increasing risks involved in securing traditional energy sources. The links between energy provision and conflict need to be better understood. The consumer, particularly in the northern hemisphere, must become more discerning of how energy is sourced and provided.

In our industrialized world, relationships between states and the social contract within states have been partly shaped by the demand for and supply of energy, and by who has access to its benefits. Inter-state wars have been fought over energy resources such as oil for example – and the revenues supplied to governments by this ‘black gold’ along with oil pricing policy for consumers (e.g. fuel subsidies) has shaped the degree of interdependency between central governments and citizens within states.

Indeed, over the past 100 years or so, demand for and supply of oil has come to dominate the relationship between those having energy resources and those wanting them. Oil provides warmth, electricity and fuel for transport. It is the lifeblood of the global grid systems which connect us – for better or worse.

Oil rich states such as Norway, Azerbaijan, Nigeria and Saudi Arabia have been, to different degrees, both the target of oil dependent societies and the recipients of enriching oil revenues. They have fared differently, their ability to withstand the shocks that come with dealing with ‘black gold’ determined by broader governance capacities. Conflict and violence has been as common an outcome as peace and prosperity.

Now the energy picture is changing due to growing uncertainty over the supply of energy resources, the continued upward trend in demand, and the impact of energy use on the environment. Will this trigger a change in the nature of relationships between and within states? Will patterns of peace, conflict and violence consequently change? If so, then will these changing patterns be for better or worse?

There is one thing about which we can be certain - efforts to adjust energy provision in ways which maximize the potential for peace and development will fail if the consumer does not become more discerning of the sources and methods of energy provision which most of us take for granted. Over the coming decades, a growing worldwide middle class will undoubtedly put increasing demands and strain on energy provision, which will simultaneously create pressure for innovation into new technologies. And with the expansion of new technologies, the costs of new ways of generating energy will fall. However, removing the political barriers to equitable access to energy provision will not be so straightforward. This must also be part of the new, emerging energy discussion.

Fossil fuels, energy provision and conflict

Consider the conflict management challenges inherent within the system of energy provision based on oil and gas, as depicted in the flow diagram below. The chart illustrates the difficulties involved in managing energy provision in ways which do not lead to tension and violence. The system creates price hikes in electricity and other oil based products for example, preventing access for many; elite capture of oil and gas revenues keeps power in the hands of an unaccountable few; the withholding of oil and gas supplies enables some states to manipulate others; and the extraction of resources is sometimes only possible if large numbers of people are forcibly moved from their homes. These and other factors can lead to violence and instability, inhibiting development and security for vulnerable communities.

Of course, global development and the dynamics of our industrialised society are based on fossil fuels and the model of energy provision which they generate. There are, therefore, many social and economic benefits and the purpose of this paper is not to somehow challenge the whole industrial revolution. Much is being done to improve the governance of this system (for example, Alert’s work on Conflict Sensitive Business Practice) and fossil fuels will remain a major part of the energy mix for decades to come.

With this in mind it is important to think about the links between managing conflict and violence and the development of new oil and gas exploration, as states continue to pursue oil, gas and coal as part of their energy security policies. Despite warnings from organisations such as Global Witness, campaigning for world leaders to stop burying their heads in the sand and wake up to the realities of the ‘oil crunch’, oil companies continue to drill for ever deeper oil and gas supplies and states continue to compete for access to these supplies, including in countries with questionable human rights records. The challenge for the fossil fuel energy industry seems to be to ‘clean up’, both in terms of CO2 emissions and in terms of propensity to deepen corruption and injustice. A ‘doubled headed’ challenge you might say.

Europe’s thirst for imported oil and gas for example (driven by continued increase in energy demand and the decline in indigenous fossil fuel production) is pushing its member states to strengthen relationships with energy rich but human rights poor countries in Central Asia, arguably cutting across aspects of the EU’s neighbourhood policy and its democratic posture. Meanwhile, on the CO2 front, technology is improving the efficiency of fossil fuel burning and the coal industry (which currently fuels 41% of the world’s electricity) in particular is making strides to become a clean and environmentally friendly resource by supporting new technology enabling carbon capture and storage (a set of technologies to collect CO2 from fossil fuel power plants, transport it, and store it under the land or seabed for hundreds if not thousands of years).

The risk carried by this double headed ‘clean up’ agenda is that the ability to develop environmentally friendly technology will drown out the need to support better governance practices.

Renewables, energy provision and conflict

So what of renewables? Do they fare any better when it comes to questions of access, resilience to political manipulation and elite capture? By comparison with fossil fuels, the renewables market is the ‘new kid on the block.’ Rather than ‘clean up’, the challenge here is to ‘scale up’, with little track record to mark the copybook.

Policy is currently orientated towards investment in new technologies which will enable oil to be replaced by renewables but large scale grid systems to remain. Let’s keep the system but put renewables into it instead of fossil fuels.

An example of this approach is the Desertec project in North Africa. The Desertec Industrial Initiative (DII) aims to build a renewable energy 'belt' (see map below) in the Middle East and North Africa (MENA) to provide 15% of Europe's electricity by 2050 as well as a portion of the producer countries' energy needs. In addition to being a vast petroleum repository, the Middle East is also the heart of the most potentially productive region on the planet for renewables. It is in this environment Desertec is being developed.

But although the project seems to promise part of the answer to Europe’s increasing energy insecurity, there are a number of issues that suggest similar management challenges to those of fossil fuels when it comes to tension and conflict. For example, there is concern about whether the project would be vulnerable to terrorist attacks. MENA is considered largely unstable, (an anti-Western regime in Iran, Shia and Sunni separatist movements in Iraq, rebellions in Yemen, etc.), threatening the distribution of energy both locally and internationally. Furthermore, the energy industry in MENA is either wholly or majority state-owned. This does not necessarily mean Desertec will be too, but the initiative is vulnerable to the involvement of corrupt state institutions, a regional energy industry which is neither transparent nor competitive, and to the absence of a consistent regulatory framework.

Desertec is, perhaps, not as controversial as another large scale renewables project however – the Grand Inga Hydro in conflict affected Democratic Republic of Congo (DRC). Both projects will generate significant energy for export to Europe, but it is the Grand Inga Hydro which is most exposed to the charge of exploiting natural resources of the southern hemisphere for export to the north. This huge hydro scheme, on the site of the world’s largest waterfall, has been touted as a potential solution to Africa’s ongoing energy crisis. With the number of Africans without access to electricity expected to grow between now and 2030, the Grand Inga Project, with a price tag of $80bn, is seen by many as an answer to Africa’s development needs.

However, opponents of the Grand Inga project argue that most of the electricity generated will go to South Africa, Europe and the Middle East. As a result, most ordinary Africans will not benefit from the project, any more than they did from previous projects aimed at rehabilitating the existing Inga dams. In fact, these previous, somewhat smaller hydro projects on the Congo River have been noted for the high levels of corruption involved amongst government officials, contracting companies and other profiteers, and for the lack of care shown towards those displaced by the dams. Given the $80bn price tag of the Grand Inga project, its critics fear continued practices of these kinds – which the vulnerable, conflict affected DRC will find hard to prevent - will lead to the further exclusion of African populations from the benefits of electricity and development, to the benefit of small and powerful elites. It is this kind of conflict-insensitive development which can weaken governance institutions, widen the gap between the haves and the have-nots, erode the relationship between the governors and the governed and ultimately lead to conflict and violence.

It is by no means certain therefore, that these new, large scale renewable projects will benefit the peace and development prospects of countries already exposed to vulnerability, conflict and weak governance.

There are, by comparison, small-scale renewable energy projects, from farm biogas to mini-hydro to thermal solar power. Supporters of these models point out that solar power in its broadest sense of including plant matter, winds and tides is essentially limitless and so, in a concentrated form under local control with falling costs, becomes affordable, accessible, and likely to reduce pressures which give rise to violence. However, the relationship between small scale models of energy provision and the ability of states and communities to manage tension and violence also needs further research and exploration.

Now is the time to explore these links – between different models of energy provision and conflict management. As climate change and diminishing supplies of fossil fuels force us to think about where we get our energy from, it is also important to consider how it is provided. Large scale projects such as Desertec and the Grand Inga Hydro are essentially extractive, and arguably continue the practice of contractual arrangements between often unaccountable elites and international buyers and companies. This tends to be to the detriment of local politics and relationships, and the exclusion of local populations.

As we are forced to consider a major shift from fossil fuels to renewables there is an opportunity to think about how we manage energy provision in ways which build and sustain peace and development - to go beyond environmental concerns to consider governance ones.

The Desertec Industrial Initiative (Source: Desertec Foundation)

Local realities – the case of Mindanao (Southern Philippines)

The challenges inherent in developing ways of meeting energy demand in the face of climate change, dwindling fossil fuels, and vulnerability to violence can be illustrated by looking at the case of Mindanao in the Southern Philippines.

The gap between demand for energy and its supply is widening rapidly in this resource rich region. By 2014 it is estimated that this gap will be -14%, resulting in rolling power cuts of up to six hours a day. Most energy is provided by hydro power and in particular from the Agus and Pulangi hydro power stations which are located in the Autonomous Region of Muslim Mindanao (ARMM). The ARMM is the focus of continued fighting and dispute between the Government of the Republic of the Philippines (GRP) and the Moro Islamic Liberation Front (MILF) demanding autonomy for the predominantly Muslim ARMM which sits within a predominantly Catholic Philippines. In addition, strong local clans compete violently for the control of economic resources.

One of the larger energy companies operating in Mindanao is Davao Energy and Light. This company is proposing to build a 200MW coal fired power station in the South of Mindanao (outside the ARMM) which would go some way towards closing the energy gap. Under pressure from environmentalists and climate change campaigners the company has developed ‘clean coal’ technology which, says the company, would keep omissions within legal limits and deliver energy at competitive prices - one aspect of the ‘clean up’ approach. A site for the plant is being inspected and plans to the council will follow.

However, what remains uncertain is the impact such a power station will have on the dynamics of conflict in Mindanao. Being outside the ARMM may make it less vulnerable to attack by the MILF. But on the other hand, it may be seen as being in the control of the rich South, controlled by local political interests, with those in the ARMM losing out on access. Furthermore, whilst the company and the local council are pushing for large scale power plants to impact on the widening gap between demand and supply of energy, there has been limited exploration of increasing the use of small scale hydro schemes, though sites for these are plentiful.

What is encouraging is that the company is engaging with local groups and ideas are being generated. There seems to be space for discussion about how this response to the energy question in Mindanao can be linked to peacebuilding efforts. Such discussion will need to involve those with a stake in Mindanao and the ARMM, including civil society, local government and business. If ways can be found to govern Mindanao’s energy provision in ways which take account of the needs and interests of different groups then local governance capacities will be strengthened and improved levels of access to energy as well as security will follow.

Conclusion

The energy debate is changing in a number of ways. Oil is becoming vulnerable as the primary source of energy. This is due to both (a) dwindling supplies – although the notion of ‘peak oil’ is contested, there is no argument about the fact that oil is a finite resource, and (b) its propensity to produce CO2 at a time when there is growing consensus amongst the international community, the extractives industry itself and the general public on the need to tackle climate change. The long term trend in oil price is upwards, as this finite resource becomes scarcer, carbon taxes are added, and unconventional deposits become more difficult to extract.

In response, renewable energy projects (and nuclear energy – which this paper has not touched upon - as a way of both reducing our dependence upon oil and reducing the amount of greenhouse gas emissions) are scaling up, where cost and technology allow. As technology develops ever faster and attention shifts to the huge potential of renewable energy, the possibility of harnessing large quantities of hydro and solar power is viewed by many as both feasible and desirable. The Desertec condensed solar power scheme in North Africa and the Grand Inga Hydro project in the DRC are two leading examples.

As one line of thought expands the notion of scaling up, another is taking the energy debate in the opposite direction. With the prospect of no longer being able to secure sufficient supplies of oil, gas and coal to meet increasing energy demand, many are exploring small scale models of energy provision based on renewables.

At the same time, the challenge of effective regulation of the energy industry is becoming more pronounced. As some states become more anxious about energy provision, others eye opportunity. The trade-off between human rights/conflict sensitivity/environmental concerns and access to energy resources, for example, is likely to become more common as the need for energy outweighs questions about how this energy is secured and who benefits. The job of energy companies tasked with securing energy resources is becoming more complex. And the energy consumer is caught between need and the increasing risks involved in securing traditional energy sources. In this context there is a need for the consumer, particularly in the northern hemisphere, to become more discerning of how energy is sourced and provided.

Changes to the ways in which energy provision is governed (rather than how it is sourced) may emerge as these shifts gather momentum, but this is by no means a foregone conclusion, despite the opportunity and need. The links between energy provision and conflict, particularly in vulnerable regions with weak governance institutions, need to be better understood. As we are forced to change the way we think about energy there is an opportunity to consider how the emerging new pathway towards a different mix of energy sources can also be a path towards greater levels of peace and development.

The cost of not taking this opportunity is likely to be a continuation of systems of energy provision which privilege the northern hemisphere over the south, which deny large sections of the world’s population access to electricity and other forms of energy, which leave the populations of conflict affected countries vulnerable to authoritarian masters, unenlightened energy companies and the increasingly energy hungry states of the north, and which make little contribution to the governance challenges the world faces. This despite the key role energy plays in the development of our societies.

By. Phil Champain

The author would like to thank Diana Klein, Ulrike Joras, Gulru Nabieva and Ken Webster for their ideas and input.

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Anonymous on January 07 2011 said:

The "growing consensus" over the need for carbon hysteria is actually a "shrinking consensus." Rather than jumping off the cliff out of fear of CO2, most rational people are in favor of better understanding the natural cycles that have always driven climate, and continue to do so.The IPCC since ClimateGate is increasingly seen as a criminal organization designed for extortion, like most of the United Nations appears to be.